PV2 Function

Syntax

Present_Value as N = PV2(N periodic_investment,N periodic_interest_rate,N time_periods)

Arguments

periodic_investment: The amount of each equal investment, which may be either positive or negative. Numeric
periodic_interest_rate: Interest rate per time period. Interest rate must be a positive number. Numeric
time_periods: Number of time periods (and investments), which must be a positive number. Numeric

Description

Returns the present value of a stream of periodic investments over a specified fractional term.

Discussion

PV2() returns the present value of a stream of Investment s, invested at a fixed Interest_Rate for a certain Number_Of_Time_Periods. The PV() function is used to find the amount that must be invested now to produce a given future amount. PV2() is the same as PV() , except that it does not round the Number_Of_Time_Periods argument.

Example

Assume a 12% per annum interest rate. An annuity pays $100 per annum for the next 30 years. To compute the present value of this payment stream, use the following expression:

pv2(100, .12, 30) -> 805.52
pv2(100, .12, 12.5) -> 631.220695
pv(100, .12, 12.5) -> 642.354842
pv(100, .12, 13) -> 642.354842

Note the difference between PV2() and PV().